The SPDR S&P 500 ETF Trust (SPY) and the iShares Core S&P Small-Cap ETF (IJR) are both among the Top 100 ETFs. SPY is a SPDR State Street Global Advisors Large Blend fund and IJR is a iShares Small Blend fund. So, what’s the difference between SPY and IJR? And which fund is better?

The expense ratio of SPY is 0.03 percentage points higher than IJR’s (0.09% vs. 0.06%). SPY also has a higher exposure to the technology sector and a lower standard deviation. Overall, SPY has provided higher returns than IJR over the past ten years.

In this article, we’ll compare SPY vs. IJR. We’ll look at portfolio growth and industry exposure, as well as at their holdings and risk metrics. Moreover, I’ll also discuss SPY’s and IJR’s performance, fund composition, and annual returns and examine how these affect their overall returns.

Summary

SPYIJR
NameSPDR S&P 500 ETF TrustiShares Core S&P Small-Cap ETF
CategoryLarge BlendSmall Blend
IssuerSPDR State Street Global AdvisorsiShares
AUM374.03B68.64B
Avg. Return14.41%13.97%
Div. Yield1.3%0.96%
Expense Ratio0.09%0.06%

The SPDR S&P 500 ETF Trust (SPY) is a Large Blend fund that is issued by SPDR State Street Global Advisors. It currently has 374.03B total assets under management and has yielded an average annual return of 14.41% over the past 10 years. The fund has a dividend yield of 1.3% with an expense ratio of 0.09%.

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.

SPY’s dividend yield is 0.34% higher than that of IJR (1.3% vs. 0.96%). Also, SPY yielded on average 0.44% more per year over the past decade (14.41% vs. 13.97%). The expense ratio of SPY is 0.03 percentage points higher than IJR’s (0.09% vs. 0.06%).

Fund Composition

Industry Exposure

SPY vs. IJR - Industry Exposure

SPYIJR
Technology24.22%14.32%
Industrials8.86%17.31%
Energy2.86%4.0%
Communication Services11.14%2.59%
Utilities2.45%1.8%
Healthcare13.09%11.55%
Consumer Defensive6.32%4.01%
Real Estate2.57%9.55%
Financial Services14.23%15.91%
Consumer Cyclical12.0%13.61%
Basic Materials2.27%5.34%

The SPDR S&P 500 ETF Trust (SPY) has the most exposure to the Technology sector at 24.22%. This is followed by Financial Services and Healthcare at 14.23% and 13.09% respectively. Utilities (2.45%), Real Estate (2.57%), and Energy (2.86%) only make up 7.88% of the fund’s total assets.

SPY’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.0%, and 13.09%.

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

SPY is 9.90% more exposed to the Technology sector than IJR (24.22% vs 14.32%). SPY’s exposure to Financial Services and Healthcare stocks is 1.68% lower and 1.54% higher respectively (14.23% vs. 15.91% and 13.09% vs. 11.55%). In total, Utilities, Real Estate, and Energy also make up 7.47% less of the fund’s holdings compared to IJR (7.88% vs. 15.35%).

Holdings

SPY - Holdings

SPY HoldingsWeight
Apple Inc5.9%
Microsoft Corp5.6%
Amazon.com Inc4.05%
Facebook Inc A2.29%
Alphabet Inc A2.02%
Alphabet Inc Class C1.96%
Berkshire Hathaway Inc Class B1.45%
Tesla Inc1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.29%

SPY’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.9%, 5.6%, 4.05%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.96%), Berkshire Hathaway Inc Class B (1.45%), and Tesla Inc (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SPY’s holdings at 1.37% and 1.29%.

IJR - Holdings

IJR HoldingsWeight
BlackRock Cash Funds Treasury SL Agency1.08%
GameStop Corp Class A0.86%
Omnicell Inc0.61%
Stamps.com Inc0.58%
Saia Inc0.57%
Power Integrations Inc0.57%
Exponent Inc0.54%
NeoGenomics Inc0.53%
Chart Industries Inc0.53%
Macy’s Inc0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

Risk Analysis

SPYIJR
Mean Return1.231.21
R-squared10076.03
Std. Deviation13.5618.68
Alpha-0.09-3.7
Beta11.2
Sharpe Ratio1.040.74
Treynor Ratio14.1210.77

The SPDR S&P 500 ETF Trust (SPY) has a Alpha of -0.09 with a Beta of 1 and a Standard Deviation of 13.56. Its Treynor Ratio is 14.12 while SPY’s R-squared is 100. Furthermore, the fund has a Sharpe Ratio of 1.04 and a Mean Return of 1.23.

The iShares Core S&P Small-Cap ETF (IJR) has a Alpha of -3.7 with a R-squared of 76.03 and a Standard Deviation of 18.68. Its Sharpe Ratio is 0.74 while IJR’s Beta is 1.2. Furthermore, the fund has a Treynor Ratio of 10.77 and a Mean Return of 1.21.

SPY’s Mean Return is 0.02 points higher than that of IJR and its R-squared is 23.97 points higher. With a Standard Deviation of 13.56, SPY is slightly less volatile than IJR. The Alpha and Beta of SPY are 3.61 points higher and 0.20 points lower than IJR’s Alpha and Beta.

Performance

Annual Returns

SPY vs. IJR - Annual Returns

YearSPYIJR
202018.25%11.24%
201931.29%22.79%
2018-4.45%-8.43%
201721.69%13.2%
201611.8%26.49%
20151.34%-2.0%
201413.53%5.67%
201332.21%41.36%
201215.84%16.28%
20112.06%0.9%
201014.93%26.14%

SPY had its best year in 2013 with an annual return of 32.21%. SPY’s worst year over the past decade yielded -4.45% and occurred in 2018. In most years the SPDR S&P 500 ETF Trust provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.53%, 14.93%, and 15.84% respectively.

The year 2013 was the strongest year for IJR, returning 41.36% on an annual basis. The poorest year for IJR in the last ten years was 2018, with a yield of -8.43%. Most years the iShares Core S&P Small-Cap ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 11.24%, 13.2%, and 16.28% respectively.

Portfolio Growth

SPY vs. IJR - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SPY$10,000$41,71214.41%
IJR$10,000$38,80013.97%

A $10,000 investment in SPY would have resulted in a final balance of $41,712. This is a profit of $31,712 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.41%.

With a $10,000 investment in IJR, the end total would have been $38,800. This equates to a $28,800 profit over 11 years and a compound annual growth rate (CAGR) of 13.97%.

SPY’s CAGR is 0.44 percentage points higher than that of IJR and as a result, would have yielded $2,912 more on a $10,000 investment. Thus, SPY outperformed IJR by 0.44% annually.

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